Analysis Of Asymmetric Effect Of International Oil Price Shocks On China’s Economy

Oil is the blood of modern industry.After entering the 21 st century,the relationship between international oil prices and macroeconomic shows a new dynamic change.The rising oil prices did not hinder the national economic development,but made the coexist of high oil prices,high output growth rate and low currency rate happen.Under the background of the sharp fluctuation of oil price and uncertain economic situation,It is of great practical significance to effectively realize the shock effect of international oil price in macroeconomic system and to stabilize the operation of oil market and guarantee the economic development.Based on the overall effect of oil market,the theory of distribution effect and the analysis of the market transmission mechanism,the monthly FOB price data of Brent oil spot from January 1996 to April 2016 were taken as samples.LSTVAR model,generalized impulse response function and other methods were used to study the asymmetric impact of oil price fluctuation on C hina’s macroeconomic.Then the daily FOB price data from January 1997 to June 2016 were analyzed.Spline-GARCH model was used to separate the low frequency fluctuation of the market,and the monthly low frequency fluctuation sequence was used to measure the uncertainty of oil price.Afterwards,the LSTVAR model,generalized impulse response function and other methods were used to study the asymmetric impact of uncertainty of oil price on C hina’s macroeconomic,and the reasons were interpreted.Finally,the paper put forward some suggestions on how to improve the oil reserve system and adjust the energy structure,so as to provide reference for C hina to operate the economic stably in the face of oil price shock.The empirical study shows that oil price shocks in different economic conditions had a significant asymmetric effect on C hina’s macro economy.The output growth threshold of China’s LSTVAR model was 1.5035%,that is,when the month-over-month economic growth is more than 1.5035%,the oil price shock would be a significant impact on macro economy.The positive and negative impacts of oil price in the same economic state had significant asymmetric effects on China’s macro economy,which were specifically in:(1)Under the condition of low economic growth,the impact of oil prices only had short-term asymmetric effect.(2)In general,the impact of oil prices under high growth conditions was greater than that under low growth conditions.The special case was that the positive impact of oil prices under low growth conditions was significantly greater than that under high growth conditions.(3)the effect of the positive impact of oil pric e in the low growth state was greater than that of the negative impact.(4)the effect of the negative impact of oil price in the high growth state was greater than that of the positive impact.In terms of uncertainty,the low-frequency fluctuations in the oil spot market from January 1997 to April 2016 experienced a total of 12 peaks or valleys,in which the US subprime mortgage crisis in 2008 was the largest.Spline-GARCH model is superior to the standard GARCH model for measuring oil price uncertainty.The oil price uncertainty in different economic conditions had significant asymmetric effects on China’s macro economy,the output growth rate threshold of LSTVAR model was 2.8312%,which were specifically in:(1)oil uncertainty impact was not obvious in s hort-term but significant in long-term.(2)The impact of oil price uncertainty under the condition of high economic growth was greater than that under the condition of low economic growth.In addition,oil price uncertainty had no significant asymmetric effect on the macroeconomic economy in C hina under the same economic condition.About the latest changes in the oil market,this paper uses the advanced econometric model to analyze the asymmetric effect of positive and negative effects of oil price on China’s macroeconomy in different economic conditions,and effectively measure the uncertainties of oil price in the past 20 years,and further discusses the asymmetry effect of oil price uncertainty impact on China’s macroeconomy under different economic conditions.The conclusion can provide some reference for the government in the aspects of oil market management and money supply regulation.